Matthews, N.C. -- Family Dollar Stores on Thursday said its board rejected a takeover bid by an activist investor, saying it "substantially undervalues the company." In February, Nelson Peltz's Trian Fund offered $55 to $60 per share, or about $6.99 billion, for Family Dollar.
The chain said it also adopted a shareholder rights plan, commonly called a "poison pill," that would significantly dilute shares if a takeover attempt proceeds.
Peltz, Family Dollar's largest shareholder, started increasing his stake in the company last summer, saying the stock was undervalued. He said he met with senior management to discuss the company's direction. The Trian Fund bought more Family Dollar shares in January.
Family Dollar's board said that pursuit of a sale is not in the best interests of shareholders, and that the best way to deliver value to shareholders is to continue implementing the company's strategic plan announced in September.
Howard Levine, chairman and CEO, said the results from its fiscal year reflect its strategic plan, noting that the company has accelerated new store openings, launched an ambitious, multi-year store renovation program, and invested to improve our operational capabilities.
"Family Dollar is executing effectively on its business plan and has a proven record of delivering superior results for shareholders," said Levine.
Family Dollar has more than 6,800 stores in 44 states.